Public Finance

Richard Tresch earned a bachelor’s degree in 1965 from Williams College and a doctorate ineconomics in 1973 from the Massachusetts Institute of Technology, where he was a teaching assistantprior to joining Boston College. He joined the Boston College faculty in 1969, and during his49-year-long career in the college, Dr. Tresch has served as the Chairman of the Department ofEconomics, Director of Graduate Studies, and Director of Undergraduate Studies. Currently, he isProfessor Emeritus of Economics at Boston College. In 1996, he was chosen as the MassachusettsProfessor of the Year by the Carnegie Foundation for the Advancement of Teaching. He was oneof 585 national entrants in the foundation’s U.S. Professors of the Year Program, which salutesoutstanding undergraduate instructors, with the award recognized as one of the most prestigioushonors to be bestowed on professors. Dr. Tresch, a member of the American Economic Association,has served on the board of editors of the American Economic Review and contributed to the NewEngland Journal of Business and Economics and Public Finance. Moreover, he is the editor of a fourvolumemajor reference work on public sector economics.

"...a detailed introduction to theoretical work on many of the core issues in contemporary public economics. Careful and comprehensive, it will provide readers with an ideal springboard to further research." --James M. Poterba, Mitsui Professor of Economics, Massachusetts Institute of Technology, Cambridge, USA"... outstanding in the breadth of its coverage, in the quality of exposition, and in the balance between theory and policy... especially good at melding newer approaches to the normative study of the public sector with traditional ones." --Robin Boadway, Queen's University in Kingston, Ontario, Canada"I have hoped for years that Richard Tresch would revise his Public Finance text. This volume is well worth the wait. It is comprehensive, up-to-date, and very clearly written. It is a natural reading for a graduate course in public finance. It will also serve as a fine reference for specialists in the field." --Harvey Rosen, Department of Economics, Princeton University, Princeton, USA

• Part I: Introduction: The Content and Methodology of Public Sector Theory1. Introduction to Normative Public Sector Theory2. A General Equilibrium Model for Public Sector Analysis3. First-Best and Second-Best Analysis and the Political Economy of Public Sector EconomicsPart II: The Theory of Public Expenditures and Taxation—First-Best Analysis4. The Social Welfare Function in Policy Analysis5. The Problem of Externalities--An Overview6. Consumption Externalities7. Production Externalities8. Global Warming: An Application of Externality Theory9. The Theory of Decreasing Cost Production10. The First-Best Theory of Taxation11. Applying First-Best Principles of Taxation—What to Tax and HowPart III: The Theory of Public Expenditures and Taxation: Second-Best Analysis12. Introduction to Second-Best Analysis13. The Second-Best Theory of Taxation in One-Consumer Economies with Linear Production Technology14. The Second-Best Theory of Taxation with General Production Technologies and Many Consumers15. Taxation Under Asymmetric Information16. The Theory and Measurement of Tax Incidence17. Expenditure Incidence and Economy-Wide Incidence Studies18. The Second-Best Theory of Public Expenditures: Overview19. Transfer Payments and Private Information20. Social Insurance: Medical Care21. Social Insurance: Social Security22. Externalities in a Second-Best Environment23. Decreasing Costs and the Theory of the Second-Best—The Boiteux Problem24. General Production Rules in a Second-Best Environment25. Behavioral Public Sector EconomicsPart IV: Fiscal Federalism and International Public Finance26. Optimal Federalism: Sorting the Functions of Government Within the Fiscal Hierarchy27. Optimal Federalism: The Sorting of People within the Fiscal Hierarchy28. The Role of Grants-in-Aid in a Federalist System of Governments29. International Public Finance